Construction in Romania - Key Trends and Opportunities to 2022

Construction in Romania - Key Trends and Opportunities to 2022

Summary

Construction activity in Romania was weak throughout 2017, due to low investment in infrastructure projects on the back of political uncertainty and delayed structural reforms. Consequently, the industry’s output value registered a decline of 1.2% in real terms in 2017, which was preceded by an average annual growth of 5.8% during 2013-2016.

The industry is expected to recover in 2018, however, with growth continuing through the remainder of the forecast period (2018-2022), supported by a revival in public sector investment in transport, residential and commercial construction projects, coupled with financial assistance provided by the European Union (EU) to develop the country’s overall infrastructure. Additionally, the ongoing 2014-2020 Large Infrastructure Operational Program - under which RON45.3 billion (US$11.3 billion) is being invested until 2020 to develop the country’s transport and energy infrastructure - is expected to support growth.

The industry’s output value in real terms increased at a compound annual growth rate (CAGR) of 4.42% in the review period (2013-2017), and is expected to post a forecast-period CAGR of 3.35%.

Timetric’s Construction in Romania - Key Trends and Opportunities to 2022 report provides detailed market analysis, information and insights into the Romanian construction industry, including -
- The Romanian construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Romanian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

- Timetric expects the residential construction market to retain its leading position over the forecast period, with a share of 45.9% of the industry’s total value in 2022, supported by rising residential building permits and new housing financial aid being offered by the government. Accordingly, the government announced plans to provide RON2.0 billion (US$512.6 million) as mortgage loans throughout 2018 under the First House lending program.
- In October 2017, the European Investment Bank (EIB) announced plans to provide support to over 300 start-ups and small and medium scale enterprises in the country by financing 60.0% of the investment needed to initiate a new project. This is expected to add pace to the development of new industrial projects over the forecast period.
- Timetric expects the infrastructure construction market output to record a forecast-period CAGR of 9.89% in nominal terms, supported by the government’s effort to upgrade the country’s transport infrastructure to enhance regional connectivity and reduce traffic congestion. Accordingly, under the 2018 budget, the government allocated RON9.1 billion (US$2.4 billion) to develop the country’s transport infrastructure.
- In July 2017, the European Union (EU) announced plans to invest RON8.1 billion (US$2.0 billion) to develop various transport infrastructure projects in the country by 2020. Moreover, in November 2017, the EU granted a loan worth RON1.2 billion (US$301.0 million) to develop the national road E79 project, which will connect Romania with Hungary, Greece and Bulgaria, as well as water infrastructure in Vrancea county. These projects are expected to be completed by 2020.
- The total construction project pipeline in Romania, as tracked by the Construction Intelligence Center (CIC), including all mega projects with a value above US$25 million, stands at RON374.2 billion (US$92.6 billion). The pipeline is skewed to early-stage projects, which account for 56.5% of the pipeline as of May 2018.

Scope

This report provides a comprehensive analysis of the construction industry in Romania. It provides -
- Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Romania, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants.

Reasons to buy

- Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using Timetric's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.